Guide to Professional Services Resource Management

Optimizing resource management in this new world of work management is especially challenging. The push for digital transformation, agile practices, and other initiatives are rendering legacy resource management practices inadequate — including an attempt to manage all of these constantly moving parts in spreadsheets. As noted by Service Performance Insight in its 2022 Professional Services Maturity Benchmark:

Effective resource management manifests in better staff retention, higher levels of billable utilization and significant improvements in on-time, on-budget project delivery. Time and expense capture and billing simply cannot be managed effectively with antiquated spreadsheets.

In fact, seven of the top 10 business challenges that services leaders highlighted in the Technology & Services Industry Association’s (TSIA) 2018 State of Professional Services report are all linked to the topic of resource management. And the global benchmark study “The State of Strategy Execution: Embracing Uncertainty to Adapt at Speed” commissioned by Planview and conducted by Lawless Research, concluded that a lack of efficient and optimized resource management was among the top three barriers inhibiting most organizations’ responsiveness to change.

In this Guide to Professional Services Resource Management, we will define the concept of professional services resource management, explore why it is so vital, and discuss the relationship — and sometimes the misunderstanding — between time management and resource management.

In addition, we will look at the key elements of a resource management plan for PSA organizations, the benefits, and best practices of integrating professional services resource management software, and the critical functionality that services organizations should focus on when evaluating and choosing the right PSA tool and solution.

Professional services resource management is the practice of planning, scheduling, allocating, and re-allocating people, money, and technology to a project or program, in order to achieve the greatest organizational value.

Simply put, efficient and optimized professional services resource management results in the right resources being available at the right time, for the right work, at the right cost.

Professional services resource management has an enormous and direct impact on the health of projects and programs, as well as the profit and value generated by an organization.

When managed properly, resource management keeps projects and programs running smoothly, and establishes the foundation for on-time, on-budget project delivery. This also helps ensure that resources are not overworked and overwhelmed — which is especially problematic in the professional services space. As noted by the advisory website Consulting.us, professional services workers face higher rates of burnout than most other jobs, owing to heavy workloads often more than 80 hours per week, tight deadlines, and hefty travel schedules.

For a professional service organization, having visibility into the resource pool, being in control of resources and taking data-driven decisions in real time, is considered the “Holy Grail.” Being in control of resources could mean visibility into the following:

• Organizational, team, and individual team member capacity.
• Current and planned workload across the project lifecycle.
• Availability to take on new projects (teams and individual team members).
• How delivery is impacted (schedule and finances) when work must be re-shuffled due to changing priorities, schedule slippage, or resource attrition.
• Resource planning and resource utilization.
• Optimizing resource utilization.

There is an important relationship between time reporting and resource management. However, contrary to what some people believe, they are not the same thing. Resource management (along with resource planning and capacity planning) all refer to future plans. Time reporting refers to past work that has already been performed in the project lifecycle.

There are several benefits of time planning, including:

• Allows better time tracking of actual work performed vs. the planned work (plan vs. actuals) – when it comes to effort, cost, margin, etc.
• Allows for billing customers accurately (if necessary).
• Allows for actual resource utilization of time tracking (if necessary).
• Allows revenue forecasting
• Allows for revenue recognition for services organizations

It is important to grasp that time reporting is not required for resource planning. As such, it is possible to do one without the other across the project lifecycle.

There is no generic, one-size-fits-all resource management plan for services businesses. Each organization must take into consider a variety of internal and external factors and forecasts.

However, there are some fundamental principles and considerations that services businesses should keep in mind as they develop, maintain, and evolve their resource management plan to fit their changing overall work management needs and objectives. These principles and considerations include:

Decide on the model

Services businesses must determine if they will be managing resources through a centralized or de-centralized function, and who will be making decisions on where to staff resources.

In a centralized approach to resource management, requests are made to a central body or resource manager to approve and allocate resources. In a de-centralized approach to resource management, allocations are made locally by a team leader or project manager.

Both approaches to resource management have pros and cons. In a centralized approach, there is more control over resource allocation (and subsequently time and expense management). However, it is also more rigid and removes local autonomy. In a de-centralized approach, there is more flexibility over resource allocation. However, it requires more effective communication for shared resources.

Read next: PSA Software vs Project Management Software: What’s The Difference?

Collect staffing data points

Organizations must also seek to understand the data points that their resource managers will need to find the right resource for the right project, while adhering to time and expense management expectations. Typical staffing data points include:

• Technical skills
• Product skills
• Consulting skills
• Regional location
• Willingness to travel

Resource managers should create a list of key criteria, in order to ensure that a resource is a good fit. It is also critical to track and update this data over time. For example, a key resource may have recently acquired valuable new skills, has relocated to another city/country, or may be temporarily unable to travel.

Usually, it is the responsibility of each resource to maintain an accurate inventory of skills and availability. However, resource managers should make resources aware of this responsibility, and help them understand why it is so important. An effective PSA tool is critical here (we look closer at the core functionality of a PSA tool later in this guide).

Establish the resource governance model

A robust resource governance model helps answer pivotal questions like:

• How will we monitor and analyze staffing process to ensure it is meeting outcomes?
• How will we know that demand is likely to exceed capacity based on sales funnel?
• How will be know when it is necessary to have extra bench resources?

Organizations should establish a regular cadence with resource managers to understand the demand and capacity in both the present and future, to plan accordingly.

Define a flex strategy

An effective flex strategy helps address scenarios when resource reallocation (current or anticipated) is necessary, by addressing key issues like:

• How will we meet resource demand if it outweighs capacity?
• Do we have partners or staffing agencies to draw upon?
• It is feasible to simply slow down delivery and execute in a first-in-first-out model?
• When demand is high, what is the best way to engage with the sales team members to set proper expectations?

This approach ties closely with the next section of this guide on integration and having early visibility into potential demand from the sales team in order to time to make decisions on how to flex the capacity.

Communicate and execute consistently

Ensure that all staff involved understands the model, as well as the objectives and outcomes that the organization is trying to achieve and the role they play. This must be done consistently, and teams should be updated on a regular cadence based on the metrics that are reviewed in the governance process. Simply put, an informed team is a more engaged team.

Get feedback and iterate

Leaders should listen to and proactively talk with the resource managers and staff to understand how the model works for them. It is important to take timely action and make informed course corrections to solve problems that are identified in the field.

The ability for resource managers to implement the resource management plan effectively and efficiently, and continuously update it accordingly, is rooted in having the right professional services resource management software. Later in this guide, we will look at some of the core factors that resource managers and other leaders should look for when evaluating various solutions in the marketplace.

First, let us highlight the core benefits of integrating professional services resource management software.

Enables organizational planning for optimized resource capacity

Professional services resource management software enables organizations to plan against actual resource requirements by balancing demand and capacity planning. This also promotes accountability and improves organizational performance by utilizing people with the best skillset fit and availability. Instead of relying on guesses, resource managers can leverage what-if scenario planning and as necessary rebalance capacity based on timelines, impact of financials, and demand.

Helps organizations proactively allocate resources and reallocate as priorities shift

Professional services resource management software enables organizations to measure, manage, and track resources related to various engagements, and generate real-time visibility down to tasks or sub-tasks and track actual time spent. In addition, resource managers can leverage request management metrics to analyze the value and cost of work in real-time, and then efficiently prioritize, approve, and schedule work that aligns with strategic goals. They can also easily re-allocate resources, or if necessary, request additional resources or adjust timelines to set delivery expectations with stakeholders.

Promotes organizational tracking and resource utilization to maximize realized value

Professional services resource management software enables organizations to get a clear picture of what is happening with resources in a single location. Resource managers can review, approve, and manage resource scheduling, in order to support on-time and on-budget project delivery. They can also drill down from reports and dashboards to get the metrics and key performance indicators (KPIs) they need to drive strategic alignment of project delivery to corporate goals.

Read next: 10 Must-Have Professional Services Automation Software Features

Organizations that want to ensure that their experience integrating professional services resource management software is successful and profitable — instead of stressful and costly — are advised to keep the following best practices in mind:

Pipeline visibility is critical

Only managing active projects and their associated resource demand is not enough. Organizations must also have visibility into your upstream demand (i.e., the sales pipeline), to see and plan for how to meet demand when those opportunities close.

Integrate with the CRM early

Integrating with the CRM system early in the process helps resource managers grasp what is coming on the road ahead (or is likely to be coming), and plan accordingly.

Define the source of truth for resource data

In some cases, data such as skills is maintained in HR systems and not the PSA tool. If this is the case, then include integration with HRMS early to include on boarding and off boarding of resources, and the management of skills data.

As noted by Service Performance Insights: “Professional Services Automation provides the systems basis for initiation, planning, resource management, scheduling, execution, close and control of projects and services.” Below, we highlight the critical functionality to look for when evaluating and choosing the right s PSA solution for your professional service organization:

• Skills and availability management: the PSA solution must provide real-time data on the various in-demand skills and the availability of those skills. This allows for more precise resource allocation.
• Dashboards and reporting: the PSA solution must deliver real-time insights into what is happening with resources. The ability to build visualizations and reports from this data improves communication and decision-making.
• Request optimization: the PSA solution must automate resource requests for proper prioritization, setting the right expectations with stakeholders. One-off and ad hoc requests, “pet” projects, and non-standardized processes undermine the ability to align individual project management initiatives with corporate strategies.
• Timesheet management: the PSA solution must include robust, yet easy-to-configure and use time and expense functionality, which includes a timesheet management capability where every person can quickly and accurately log their hours. This time tracking and reporting functionality also provides a clear picture of billing and chargebacks, resource rates, and where time is being spent to ensure an appropriate balance of work types and accurate project accounting.
• Since source of truth: the PSA solution must make it possible to centralize all project management resource data in one cloud-based location. This can be done via APIs or integrations, and the vendor should have deep experience supporting both.
• Capacity forecasting: the PSA solution must give leaders the ability to balance resources evenly across the project management portfolio.

In the new world of work management, resources are now interconnected in new and different ways, such as virtual, cross-functional teams. This is driving new skills and methods of working, which resource managers, project managers, and other leaders must support and incorporate when planning to manage work.

Following the advice in this guide and using it as a framework for moving forward will help your professional service organization do what matters most in resource management: ensure that the right resources are available at the right time, for the right work, at the right cost!